Bounce Beginning To Set Up Potential Shorts

  • September 24, 2001
  • Dave Landry

On Monday, the Nasdaq gapped sharply higher and
aside from some mid-day drift, generally worked its way higher all
day. This action has it closing well.

 

The S&P also put
in an impressive performance. It too closed well.

 

The VIX ($VIX.X)
continued to implode as the market rallied. This suggests that the
fear level in the market is dropping–at least for now.

 

So what do we do?
Monday’s action leaves us with some new buy signals and day-old
buys on the Market Bias Page. Under normal circumstances, I’d be
jumping for joy.* 
However, at the risk of preaching, these are not normal circumstances.
We remain in an event–driven
environment. Therefore, keep it light no matter what you do.

Looking to potential setups, if the market
continues to bounce, we should have a plethora of shorts over the next
few days. Speaking of potential shorts, Cablevision (CVC)
is in the spirit of a Double Bottom Knockout. This is where as a stock
in a strong trend makes a “micro” double bottom (a) followed
by a knockout move (b)–trading above the prior two highs.

 

 

Frustration,
Aggravation and Sore Hands–Follow Up

Many of you emailed
about “Frustration, Aggravation and Sore Hands” (from
Friday’s piece). Thanks for the positive feedback!  However, I
still received a few emails complaining (now in perfect hindsight)
about missing last week’s sharp move lower. To these people, I suggest
you re-read Friday’s
commentary.

Best of luck with
your trading on Tuesday!

Dave Landry

sentivetradingco@prodigy.net

*If, of course, I wasn’t married and Joy didn’t mind. 

P.S. Reminder: Protective stops on
every trade!

P.P.S.
I look forward
to meeting you in fewer than
two weeks at TM2001.
Don’t hesitate to register, because in addition to
showing you every important variation on pullback setups, I’ll also be
teaching you my favorite new
techniques including: how to capture trends before the crowd
using “transition in trend” patterns
and how to ride huge momentum off false moves…both
to the long and short side.

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Alaska

 

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